The investing section is the only section that differs between the direct and indirect methods of preparing the statement of cash flows.
The cash flow direct method determines the change in cash receipts and payments reported in the Cash Flows from Operations section. The indirect method adds or subtracts net income earned in a period to calculate changes in asset and liability accounts to determine implied cash flows.
The indirect method adjusts income statement items directly in the cash flow statement based on operating cash inflows and outflows. This method provides a more logical representation of cash flow. Under the indirect method, operating cash flows are calculated on an accrual basis.
Learn more about the indirect method at
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Answer:
True
Explanation:
The capital structure is defined as the careful balancing between the equity and the debt that the entity uses to finance its assets, day-to-day operations, and future growth. It combines debt and equity. Debt comes in the form of bond issues or loans, while equity may come in the form of common stock, preferred stock, or retained earnings. The optimal capital structure is estimated by calculating the mix of debt and equity that minimizes the weighted average cost of capital (WACC) of a company while maximizing its market value. However, in calculating the WACC and evaluating the capital investment, the timing of the capital inflow is not considered.
Answer:
B. capital markets deal in long-term debt and equity securities, while money markets deal only in short-term debt.
Explanation:
Most Company uses money market to raise short term funds and capital markets for long term funds. Money market is a market for short term borrowings. Usually the securities are held for less than or up to a year. And capital market on the contrary is where securities are held for a long term i.e more than a year. Money market is concerned with liquid fund requirement and capital market is for long term capital fund requirement.
The opportunity cost of 1 bushel of tomatoes is 5/2 bushels of squash.
Explanation:
If economists lay claim to a source of money's "opportunity cost," they indicate the importance of its next best-rated alternative use.
For example, if you spend millions of dollars in a movie, you can't fully spend all the time reading a novel at home, and neither can you spend all the money on anything else.
When you can not get to a definite conclusion, you can calculate the cost of your opportunity with a very simple equation: divide the losses by whatever you can earn from choosing one position over another.
